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financial mindset

The Four Challenges to Building Wealth: Financial Organization and Coordination

You’ve made it to our final segment of our series concerning the four challenges to building wealth. We’ve explored hurdles like financial institutions and ways to adopt their strategies, lost opportunity cost, and the velocity of money. Your biggest challenge to building wealth though?

It’s you.

No matter how savvy and dedicated you may be to growing your wealth, it won’t work if you are not approaching it in an organized and coordinated way.

You Can’t Grow What You Don’t Know

The biggest reason financial organization and coordination matters is because if you can’t track your financial life you can’t determine its performance. So many people let their accounts, bills, mortgage, and more stay separate and unassociated in their minds that it’s a miracle they can pay their taxes every year, let alone handle their bills every month. Without a centralized hub for your finances that makes it simple to check your financial health, it can be almost impossible to grow your wealth effectively.

Determine What Works for You

There are plenty of ways to build that hub. Some people opt for spreadsheets that track net worth and monthly bills. These can be powerful, since they’re self-driven and require you to interact with your money in an active manner. Other people opt for web-based applications that aggregate your financial data in one place. Some utilize desktop-based software to great effect. The secret is in determining what system best meets your needs and helps you along your path to financial wellness.

Consistency is Key

Once you’ve figured out your system of financial tracking, you have to build that into your life. Set calendar reminders. Create appointments with yourself. If your tracking and managing does not remain consistent, your progress will suffer for it. Being able to observe trends such as ballooning restaurant spending or growing interest on credit card debts can help alert you to issues before they get out of hand. You should do whatever it takes to make your financial health check part of your regular routine.

Coordinate Your Financial Goals and Strategies

Once you’ve found a method that works for you and made it part of your routine, you need to use it to track your net worth as well as your additional financial goals. By tracking goals such as paying off student loans, building home equity, or eliminating high interest debts, you can begin to coordinate your finances to support those goals.

If your equity growth isn’t outpacing growing interest, you should shift your focus and capital to eliminate those debts. Need to grow an emergency fund more quickly? Consider shifting funds away from your investment accounts and toward liquid savings funds.

By putting your financial health in one accessible, trackable space and tying overall performance to your goal progress, you put yourself firmly in the driver’s seat. It can be eye-opening, intimidating, and uncomfortable, but growth comes from discomfort. The difficulties you experience now can either teach you important lessons for your future well-being or you can ignore them, as so many people choose to.

Ready to tackle those financial goals and build a future to be excited about? Contact us to get started.

Five Ways to Build Your Healthy Financial Mindset

Your bank account, investing strategy, and credit score aren’t the most important parts of your financial life. Your net worth or rate of return aren’t even the most pivotal. The most important part of your financial life is your mindset.

Without the right way of thinking and feeling about your financial well-being, those other metrics of success amount to nothing. A healthy mindset leads to healthy behaviors and a productive relationship with your money. Without this foundational approach to managing your financial life, all the positive planning and execution on the world won’t improve your overall life. Having the right money mindset means:

1. Developing an Abundance Mindset

Much of the world operates in a mindset of scarcity. The debt crises, global conflict, and fear-based media all operate from a scarcity mindset. They believe that opportunity is limited and that your good fortune is under threat. A mindset of abundance accepts these risks, but knows that there are more opportunities waiting if you plan and act effectively. Adopting an abundance mindset means being thankful for the good things in life and knowing there is more good waiting for those who plan and act correctly to reach their goals.

A good way to grow your abundance mindset is to challenge encroaching, negative thoughts that may arise when you are stressed by re-framing them as positive opportunities rather than threats.

2. Anticipating Your Nature

Part of a healthy financial mindset involves knowing yourself and being honest about who you are. We are all impulsive, emotional, messy human beings. Developing overly tight budgets that don’t allow for your occasional impulse can torpedo all of your efforts towards financial self-improvement. Feeling deprived can make you lash out and resent your own efforts in impulsive ways that lead to overcharges and other negative outcomes.

Know what your impulsive vices are and plan to reduce those in healthy ways while still giving yourself the occasional reward. Whether that means an impulsive purchase of an ebook on sale or treating yourself to a movie theater trip once a month, you have to allow yourself to enjoy life while working towards financial wellness.

3. Rolling with the Punches

The trajectory of success is never a straight line and neither is your financial trend line. Changing  behaviors, investing, and trying to better your financial status all come with associated risks. Can you handle negative returns on higher risk investments? Can you run your finances like a business and accept that your funds will be working for you in several different places? Accepting the constant presence of change and uncertainty and remaining self-assured that your strategy WILL work for you is essential for your mindset.

Automated investment and savings strategies can help make this easier for you by keeping it out of sight and out of mind. Market downturns and hiccups happen, but the trick is trusting in your strong strategy to weather the market volatility that can harm your investments.

4. Staying Motivated

Staying the course and maintaining your focus on the positive outcomes you’re working toward is easy early on in your financial journey. Can you maintain that focus in year? Five years? Figuring out what steps you have to take to keep yourself motivated and working toward financial prosperity is key for your journey. It’s a moving target and requires radical honesty with yourself, but maintaining that motivation is essential. Some people use vision boards or other simple reminders of what they’re working towards.

Some people track behavior streaks on a calendar or in a mobile app. What works best for you won’t hold true for everyone else; you just have to figure out how to keep yourself motivated in a natural and effective way.

5. Expressing Gratitude

Being thankful for what you currently have and for the future you are building will help immensely. Too many people spend their lives pessimistic and jaded, resenting their current status without taking real action to improve their standing. It goes beyond appreciating what you have. True gratitude means celebrating others’ good fortunes and contributing to a better world through your self improvement. Your most valuable asset is you, and you should be thankful for the commitment you are making to yourself and your life as you begin this journey towards a better financial life.

Taking these steps will help put you on the right path towards cultivating a healthy financial mindset. Want to learn more about effective money management principles and see how we improve our client’s lives? Contact us to discuss how we can help you on your financial journey.